Nvidia stock declined Monday as reports emerged that China’s Huawei Technologies is preparing a direct challenge to the U.S. chip giant’s dominance in artificial intelligence hardware.
Shares of Nvidia (NVDA) fell 2% to $108.84 in morning trading, underperforming the broader S&P 500, which gained 0.2%. The drop comes after Nvidia jumped 4.3% during Friday’s session.
According to The Wall Street Journal, Huawei has approached Chinese tech firms to begin testing its new Ascend 910D chip. Designed to outperform Nvidia’s widely used H100 model, the Ascend 910D could intensify competition in a critical sector for AI development.
Nvidia’s H100 chip, first released in 2022, has since been succeeded by newer generations, including its Blackwell series, but it remains a cornerstone of AI infrastructure globally.
Why the Huawei Challenge Matters
Several key factors are amplifying concerns for Nvidia investors:
- Export Restrictions:
Nvidia is banned from selling its most advanced AI chips to Chinese companies under U.S. trade sanctions. - Huawei’s Rising Influence:
Huawei is reportedly preparing to ship over 800,000 Ascend 910B and 910C chips to customers, including major firms like ByteDance, owner of TikTok. - Shrinking China Revenue:
Nvidia’s sales from China accounted for just 13% of revenue in fiscal 2025, down sharply from 26% in fiscal 2022, according to company filings. - Software Ecosystem Threat:
Analysts warn that China’s tech sector could pivot away from Nvidia’s CUDA software toward Huawei’s development platforms under government pressure.
Richard Windsor, an independent analyst with Radio Free Mobile, noted, “The real threat is China’s state-directed push to shift developers away from Nvidia’s ecosystem.”
Why Nvidia’s Broader Growth Story Remains Intact
Despite the China-specific risks, Nvidia continues to expand in other key areas:
- Elon Musk’s xAI:
Bloomberg reports that Musk’s AI startup, xAI, is seeking to raise $20 billion. If successful, a significant portion of that funding could go toward Nvidia chips for building AI data centers. - Oracle Partnership:
Nvidia announced Monday that its liquid-cooled GB200 NVL72 racks—massive AI computing systems built in collaboration with Oracle—are now ready for deployment.
Other chipmakers were mixed in Monday trading:
- Advanced Micro Devices (AMD) edged up 0.1%.
- Broadcom (AVGO) slipped 1.2%.
Bottom Line
Nvidia faces mounting pressure in China from Huawei’s ambitious AI chip development, but its global growth narrative, powered by major U.S. partnerships and surging AI demand, remains a strong counterbalance.
Investors should watch for updates on export restrictions, Huawei’s chip performance in real-world applications, and Nvidia’s ongoing expansion outside of China.
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